The government's plans for an inquiry into the UK's role in torture and rendition after 9/11 are in disarray after human rights groups queued up to denounce it as a sham and lawyers for the victims said they were boycotting the hearings.

Their anger was prompted by the publication of the detailed terms of references and protocols under which the inquiry will be run by Sir Peter Gibson, a retired judge. It showed that key hearings will be held in secret and the cabinet secretary will have the ultimate say over what the public will and will not learn.

Individuals subjected to rendition and torture during the so-called war on terror will not be permitted to ask questions of MI5 or MI6 officers and the inquiry will not seek any evidence from foreign intelligence agencies, such as the CIA, about British involvement in the torture and abuse of detainees.

The protocol states that the aim is to "establish a reliable account of what happened", but critics point out that it also says the inquiry "will not request evidence from the authorities of other countries or their personnel".

There are also doubts about how far the inquiry will go to uncover evidence about operations in which British troops secretly rendered detainees to prisons where they were likely to be abused.

Even senior Tory MPs expressed concern that the inquiry may fail to draw a line under the affair, while a medical charity that treats victims of torture warned that the level of secrecy could result in victims being denied justice.

"It's just like Bloody Sunday – this is the first torture inquiry and there will need to be another in a few years," said Louise Christian, solicitor for four men who were rendered to Guantánamo Bay in 2002. She said her clients would be playing no part in the inquiry.

Announcing the inquiry 12 months ago, David Cameron said that he and Nick Clegg were "determined to get to the bottom of what happened" because the reputation of MI5 and MI6 had been overshadowed and the UK's reputation as a country that respects human rights and the rule of law was at risk of being tarnished.

The furious criticisms triggered by publication of the terms of reference and protocols comes after months of behind-the-scenes lobbying by human rights groups who fear that the Gibson inquiry is intended to be a whitewash, rather than a genuine attempt to discover – and make public – the truth about the British government's role in the abduction and torture of its own citizens, and others, in the months and years after the 2001 al-Qaida attacks.

Some have already criticised the appointment of Gibson to head the inquiry, as he previously served as the intelligence services commissioner, overseeing government ministers' use of a controversial power that permits them to "disapply" UK criminal and civil law in order to offer a degree of protection to British intelligence officers committing crimes overseas. The government denies there is a conflict of interest.

On the other hand, Gibson and his inquiry team will have faced intense pressure from the intelligence agencies and senior civil servants, who will be anxious not only to avoid the airing of embarrassing state secrets, but to ensure that intelligence-sharing relationships with the US and others remain protected – even when those relationships have entailed the abuses at the heart of the inquiry.

So restrictive are the terms under which the inquiry will be conducted, however, that Justice, the UK section of the International Commission of Jurists, warned that it was likely to fail to comply with UK and international laws governing investigations into torture. Eric Metcalfe, the organisation's director of human rights policy said: "Today's rules mean that the inquiry is unlikely to get to the truth behind the allegations and, even if it does, we may never know for sure. However diligent and committed Sir Peter and his team may be, the government has given itself the final word on what can be made public."

Shami Chakrabarti, director of Liberty, said: "When is an inquiry not an inquiry? When it's a secret internal review. The use of torture by great democracies was the most shaming scandal of the war on terror. Today's disappointing announcement suggests ministers, not independent judges will decide what the public is entitled to know. It is very hard to see the point of wasting public money on such a sham."

Clive Stafford Smith, director of the legal charity Reprieve, said the inquiry was heading for a whitewash, with the US authorities in effect deciding what the public should learn. "Virtually nothing will be made public that is not already in the public domain," he said. "This is meant to be an inquiry into British complicity into torture and rendition, almost all of which was complicity with the Americans. Yet these terms give America a veto on much of what should be public."

Solicitor Gareth Peirce, who also represents several victims, described the inquiry as "a wholly inadequate response to the gravest of state crimes – torture". She added that while the Ministry of Defence exposed the torture of Baha Mousa to public scrutiny "the intelligence services, in contrast, are being allowed to hide".

Andrew Tyrie, the Conservative MP for Chichester, who chairs the all- party parliamentary group on extraordinary rendition, said: "Sir Peter Gibson has stated that he will not be asking the US or other foreign organisations for information on rendition. Without this information, his examination of other aspects of rendition is likely to be incomplete. The plain and highly regrettable fact is that the UK government is not in possession of all the facts on its own involvement in rendition. This is what government departments have confirmed to me."

Keith Best, chief executive of the charity Freedom from Torture, said: "Effective survivor participation demands an open process. Every decision along the way that privileges secrecy will erode the inquiry's capacity to deliver justice to victims of torture that Britain knew about or was otherwise complicit in."

Amnesty International said the government appeared to have "squandered the opportunity to address a mounting pile of allegations of involvement of its agents and policymakers in the torture and ill-treatment of detainees" in a way that ensures public confidence.

There was no immediate response from the inquiry team to the criticisms it is facing.